Budget 2022: CREDAI seeks tax exemption to boost housing demand; Increase in deduction limit on home loan interest

New Delhi: Realtors’ apex body CREDAI has sought various tax exemptions to boost housing demand, including raising the limit for deduction of interest on home loans to Rs 5 lakh from the existing Rs 2 lakh.

In its budget recommendations to the finance ministry, CREDAI, which has around 13,000 developer members, has also sought a change in the infrastructure status and definition of affordable housing for the sector.

CREDAI National President Harsh Vardhan Patodia is hopeful that the upcoming budget will give the much-needed impetus to infrastructure development and housing by introducing various amendments, relaxations and extensions.

Patodia said, “We urge the Finance Ministry to increase the interest deduction for homebuyers for tax exemption under section 24(b), especially with the onset of the third wave to boost the overall home buying sentiment in these difficult times. to boost.”

CREDAI also sought amendment in Section 80C under the Income Tax Act for raising the limit for repayment of home loan principal, reduction in income tax burden on rental housing and long-term capital gains on capital assets.

On interest deduction on home loans, CREDAI said that “in case of individuals, interest should be allowed without limitation in respect of the first self-occupied property.”

Alternatively, the limit for deduction of interest in respect of self-occupied property should be increased to Rs.5 lakh.

CREDAI said a ceiling of Rs 45 lakh on property value to qualify as affordable housing provides housing in metros for benefits under Section 80IBA, which encourages the development of such low-cost homes. .

The unit price limit has been raised to Rs 75 lakh (for non-metro cities) and Rs 1.50 crore (for metro cities).

As builders are entering into joint development agreements (JDAs) with landlords to develop new projects, CREDAI pointed out that the payment of tax at the time of JDA, while the actual consideration will flow at a future date, will be applicable for housing and actuals. The copy acts as a damper. property development.

“The amendment will help in avoiding huge amount of litigation,” the association said.

CREDAI-MCHI President Deepak Goradia said: “We are hopeful that the upcoming budget will bring realty under infrastructure status which in turn will unlock several tax benefits to boost foreign and local investment and overall demand in the region.”

He said the government should consider significantly increasing the tax exemption for home buyers.

To promote rental housing, CREDAI suggested that 100 per cent of rental income up to Rs 20 lakh per annum should be exempted from payment of income tax, with institutions paying MAT as applicable.

Established in 1999, CREDAI is the apex body for private real estate developers in India, representing over 13,000 developers through 21 states and 217 city chapters across the country.

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